Finance Management (like a boss) – GCSE Business Studies Revision

Sorting out your cash flow

  • Get an overdraft! Already got one? Get a BIGGER one!
  • Improve your trade credit (ask suppliers if you can pay tomorrow… or the day after)
  • Get more deposits… tell your new customers they can’t “pay in six months” any more
  • De-stock… get rid of your spare stuff, and stop renting that warehouse!
  • Lease (borrow), don’t buy!
  • Delay paying… but this could get you a bad reputation, or might be against the law
  • This is cash flow we’re talking about here, so these fixes are all rather short-term. They ought to keep a business running on a daily / weekly business if it got into trouble

Increasing Profits

  • There are ways of increasing your income in the long-term…
  • One of these is to expand
  • Internal expansion is the safest way to do this, and involves opening more shops or offices, or making your current one BIGGER
  • External expansion is more risky,  but could pay off nicely for shareholders
  • It includes taking over other companies, and franchising
  • Aside from expanding, there are two other ways…
  • The thing is, I like to keep these paragraphs quite small so I’m gonna start a new one:

Reducing Costs

  • Fire people… Get rid of someone and share their work out.
    Maybe a more politically correct and less evil way of saying this is “make redundancies”, or “reduce the workforce”
  • Managers get paid more, so you can save a lot by firing them…
  • Cut wages. But doing these things is pretty nasty to your employees.
  • It’s probably not a good idea because they could get very unhappy and lose motivation / productivity. They might even just quit.
  • On a lighter note, you could contract out some jobs – instead of hiring new employees to do something, pay a different company to do it for you

Increasing Revenue

  • Raise prices. This will bring in more money, but if customers find cheaper options out there your sales will fall!
  • Add new products. It could cost a bit in research and development, but a new product could be just the thing a business needs!
  • Increase sales. Advertise to attract new market segments!
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About Matt

I like writing, filmmaking, programming and gaming, and prefer creating media to consuming it. On the topic of consumption, I'm also a big fan of eating.
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